TheOptionPlayer.com sets up a Nasdaq Index ETF (NasdaqGM: QQQ) short-term (38-day) option trade (based on Tuesday’s closing quoted bid/ask prices)
Investors could simultaneously:
The difference between funds received and paid out is a $.31 per share credit which we keep if the Nasdaq Index ETF closes below $152 on Friday November 17th, but immediately execute a trade adjustment if it appears the price is moving higher. If the price gaps higher at the start of trading we might revise the strike prices. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
We executed similar trades the past few months that are profitable. As confirmed in the chart below, similar to the other major equity indexes the Nasdaq Index ETF (NasdaqGM: QQQ) is trading near all-time highs this week. The QQQ ETF is at the overbought level where the price has pulled back in the past. Already the Nasdaq Index ETF is starting to stabilize and flashing near term reversal signals. Traders appear to have already inputted promising quarterly results into stocks which help explain elevated equity prices. The Nasdaq Index is not quite as bullish as the other major stock indices and it is reasonable to expect the QQQ ETF to be below our short call on the November 17th option expiration date.
52-Week High: $148.18
52-Week Low: $113.45
Regular www.theoptionplayer.com subscribers can attest to the preponderance of successful trades published on this website.
The information presented here is for educational and informational purposes only, and this document is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful.